David Stockman, the controversial wunderkind of the Reagan revolution25 years ago, is back in hot water again. As the WashingtonPost reported Friday, SEC lawyers notified Reagan’s former budgetdirector that he could face civil charges for misleading investors inthe near-bankrupt auto-parts company that his investment fund owns. That sounds vaguely like the distant past when Stockman was accused ofmisleading Congress on a grand scale, assuring everyone of thesoundness of Reaganomics when privately he knew otherwise.

People asked me how I feel about Stockman’s new troubles because wewere friends in those olden days and I collaborated with him in atruth-telling exercize that deeply shocked official Washington at thetime. The Reagan cabinet officer (practically a kid in those days)shared his true opinions privately with me–an assistant managingeditor at the much-loathed Washington Post–and I disclosed thebracing realities in the Atlantic Monthly. Among hardcore Republicans, I was seen as Stockman’s “evil twin.” In media circles, we were bothregarded as evil for engaging in this illicit relationship.

I don’t know the facts of Stockman’s present travail, but I have ahunch he is guilty mainly of excessive optimism, not fraud. Whenasked, I express sincere sympathy for his plight. Indeed, his dilemmareminds me of playwright Clare Booth Luce’s wicked aphorism: “No gooddeed goes unpunished.”

Stockman in Washington days was a true believer, brainy and tenacious,in the mysterious arts of federal budget making, and he did indeedassert his faith in public long after the adverse realities werepersuading him that Reagan’s agenda of tax cutting and doubling defensespending wasn’t going to balance the federal budget. His greatest sin,however, was telling the truth, albeit belatedly. That is onetransgression Washington does not forgive.

In the present situation, Stockman launched his Heartland investmentfund with the most honorable of intentions. After years getting richas a Wall Street investment banker, Stockman launched the new fund torevive and modernize embattled manufacturing companies in the Midwestand his home state of Michigan.

Moreover, Stockman argued that restoration would be helped, not hurt,by adopting worker-friendly strategies as opposed to the barbaricanti-union approach of most Wall Street takeovers. This representsinvesting for the long run. Leading unions recognized he was trying todevelop a progressive departure from slash-and-burn capitalism and theysupported him with pension-fund capital. The approach succeded withsome mid-sized companies in several sectors.

In the auto sector, it failed abruptly, but not because of hisunorthodox strategy. When the bottom fell out of General Motors andFord, Stockman’s company–Collins & Aikman–was stranded just likeother major auto-parts suppliers. Whether he misjudged the situationor misrepresented it to investors, I do not know. I do feel sure hewas a victim too, perhaps of own Midwestern optimism andself-confidence. Let’s not hang the man for trying to do the rightthing.